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Week 2: Is and Globalisation

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Week 2: IS and Globalisation

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Question 2.1B - Briefly explain each of Michael Porter’s five forces that influence competitiveness in any given industry.
Traditional Rivalry among Competing Sellers:-
Companies who sell the same or similar products are forced to compete for buyers. This in turn affects the price, the distribution of products and the service the company offers. When I think of rivalry between competing sellers I think of Harvey Norman, Joyce Mayne and the Good Guys, all sell the same if not similar products however service, product availability and price can vary substantially.

Threat of New Entrants into the Industry:- As more and more new companies enter the market, companies already established with a good client base are forced to lower prices and find ways to improve business methods to try and maintain their market share. I think of Telstra, once upon a time they were the only telephone provider and as mobile phones became more popular companies like Optus, Vodafone and Virgin entered the market with lower prices and Cap Plans, in order for Telstra to compete they had to lower their prices, introduce newer and more attractive plans and better mobile coverage to try and maintain and attract new customers.

The Bargaining Power that Customers Have in the Industry:- Before customers even enter a store most have conducted some basic research on the products or services they wish to purchase, they also know roughly what the price of that particular product or service will be. This gives the customers increased ability to negotiate prices with various companies to ensure they get the best possible deal. The companies need to be flexible with both price and service otherwise customers won’t hesitate to go to the next door and spend their hard earned cash there.

Supplies Bargaining Power:- Where suppliers that offer

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